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OBAMA PLAN: MORE POLITICS THAN POLICY - In a Rose Garden event this morning, President Obama will lay out his initial submission to the deficit reduction supercommittee. White House officials say the plan would cut more than $3 trillion over 10 years. Much like the jobs plan before it, this will be more a political document than anything likely to become law.

The $1.5 trillion in tax hikes that make up half the plan (regardless of their merits) are probably not going anywhere in the current Congress. The plan includes a “Buffett rule” to make sure millionaires pay at least as high a percentage as middle-income tax payers. Even that proposal, while critical in shoring up Obama’s base and certainly reasonable, was roundly rejected by Republicans over the weekend as “class warfare.” Senate Minority Leader Mitch McConnell quipped on NBC’s “Meet the Press”: “With regard to his tax rate, if [Buffett’s] feeling guilty about it, I think he should send in a check.”

MORE DETAILS FROM THE PLAN - Per POLITICO’s Carrie Budoff Brown and Jennifer Epstein: “Responding to pressure from the Democratic base, Obama will not call for an increase in the Medicare eligibility age from 65 to 67, stepping back from a controversial idea he endorsed during private negotiations in July with House Speaker John Boehner (R-Ohio). But his plan will cut $248 billion from Medicare and $72 billion from Medicaid.” http://bit.ly/qDyfAY

SUSKIND FACT-CHECK - The White House and Treasury are not too happy with Ron Suskind’s forthcoming book, to put in very mildly. Beyond the big picture stuff on whether Treasury Secretary Tim Geithner ignored an Obama directive regarding the preparation of plans to dissolve Citigroup (Treasury says he absolutely did not), officials have been busy compiling lists of what they say are a stunning number of basic factual errors.

An administration official sent along a partial list under the headline “The Suskind Book Game: ‘Too Big to Fact Check?’” From the list of alleged errors: “1.) Suskind wrote that Larry Summers needed Senate confirmation to lead the National Economic Council. 2.) Suskind wrote that Secretary Geithner served as ‘Chairman’ of the New York Fed. 3.) Suskind wrote that Gene Sperling served as ‘an assistant Treasury Secretary.’ 4.) Suskind wrote that Geithner had ‘never been an undersecretary’ at Treasury. 5.) Suskind wrote that the acronym for the Bank for International Settlements is ‘BASEL.’ 6.) Suskind wrote that Gene Sperling played tennis at the University of Michigan.” ...

The official said all of these statements were false. For instance: “Sperling played tennis at Minnesota. Though, to be fair, both universities start with an ‘M’ and are only about 800 miles apart.” Zing!

EXCLUSIVE: ADMIN RIPS SHELBY ON CFPB - From an administration official on what they described as efforts by Sen. Richard Shelby (R-Ala.) to subject the CFPB budget to the appropriations process: “The Republicans who voted to kill the consumer agency are relentlessly doing everything they can to cripple it. They've introduced roughly a dozen bills or amendments that chip away at the CFPB's ability to protect consumers. And they've taken the unprecedented step of refusing to consider the President's director nomination until the law is changed to weaken the agency.

“Now they're at it again in the latest appropriations bill, quietly working to make the consumer agency the only banking regulator without independent funding. Congress has long recognized that bank supervision must be insulated from the political winds of Washington. That holds true whether the banking regulator is supervising for safety and soundness or consumer protection. Subjecting the CFPB's funding to the political process puts it in the crosshairs of powerful Wall Street lobbyists. For those who never wanted this agency to begin with, that's probably precisely the point.”

FIRST LOOK: ECONOMIC CRISIS EXPLAINED - Hamilton Place Strategies today will release the first of a three part report on the current economic challenges, policy options and political solutions. The first report walks through the de-leveraging process at the heart of the current slow growth environment.

From the report: “During the boom, individual savings rates as a percentage of disposable income was below 3 percent. Then from 2008 to 2011, individuals almost doubled their savings rate. Increased savings were used to pay outstanding debts. While the abnormally low savings rates of the bubble period were unsustainable, a collective sharp increase in savings provided an additional, sustained shock to the economy.” Read it at: http://scr.bi/nB7PGE

MARKETS TANK ON LACK OF EUROPE PLAN - Bloomberg’s Candice Zachariahs and Kristine Aquino: “The euro dropped against the dollar and yen for a second day after European officials failed to offer a plan to halt the region’s debt crisis and as Greece struggles to avoid default. The 17-nation currency slid against most of its 16 major peers before [EU] and [IMF] officials speak today with Greek Finance Minister Evangelos Venizelos to judge whether his government is eligible for its next aid payment. The dollar rose against the majority of its most-traded counterparts as Asian stocks slid and investors bought the safest assets on concern Europe’s debt crisis will weigh on global growth.” http://bloom.bg/oEYC8o

SUMMERS ON EUROPE - Larry Summers in the FT: “There can be no return to the pre-crisis status quo. It is now clear that market discipline within monetary union is insufficiently potent and credible to assure sound finance. It is equally clear that the risk of self-fulfilling confidence crises becomes substantial when banks and sovereigns have no access to lender of last resort financing. The responsibilities of the ECB, national financial and regulatory authorities and EU officials can be defined in different ways. But there must now be simultaneously an increase in the central financial commitment to the financial stability of member states, and a reduction in their financial autonomy, if the common currency is to survive.” http://on.ft.com/qY188L

KOTOK ON GEITHNER - Cumberland Advisors chief investment officer David Kotok emailed over the weekend: “Europe's rejection of Secretary Geithner's plea demonstrates the recurring weakness attributable to a frail Obama administration. This is what you get from repeated failed economic policies. This is the product of squandered opportunity. It is made worse by Congress' failure to find and advance any common elements. It is a sad time for America. ‘Walk softly and carry a big stick’ has given way to bleating sheep and the shepherd has no stick.”

GOOD MONDAY MORNING - Among the stranger stories in the NFL so far this year: The Redskins and Lions are both 2-0; the Eagles have a third-string quarterback named Kafka; the Bills quarterback went to Harvard, bringing the number of ex-Crimson QB’s to start in the NFL to one. Also: Some TV shows reportedly won some awards last night but M.M. could not confirm this by press time.

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DRIVING THE DAY - Obama speaks in the Rose Garden at 10:30 a.m.. Immediately after that, Geithner and OMB Director Jack Lew join White House Press Secretary Jay Carney to brief on the deficit plan (and presumably offer a few news-making answers to Suskind-related questions) ... Obama heads to NYC in the afternoon for the UN General Assembly and a DNC fundraiser in the evening ...

WCBS reported that Texas Governor Rick Perry will also be in NYC on Monday and will meet with Hispanic business leaders in Inwood, which for non-New Yorkers is the far northern tip of Manhattan, just above M.M.’s former neighborhood of Washington Heights. Have to admit the first time I saw this event on Twitter last night, I thought it was either some kind of joke or mistake. But good for Perry for making the trip uptown! He will be very near M.M. Jr.’s school!

ALSO THIS WEEK: FED TO DO... NOT MUCH - FOMC concludes its latest meeting on Wednesday and could take a few more steps to goose the economy (details below) such as an “Operation Twist” to flatten the yield curve. But nothing the Fed does is likely to move the needle very much. How could it when 30-year mortgage rates bottomed out at 4.09 percent and it hasn’t made any difference because there are so few qualified buyers. ...

House Financial Services and House OGR have a joint hearing Thursday at 2:00 p.m. on the SEC’s handling of Maddoff conflicts of interest involving former General Counsel David Becker. Could be very juicy given all the buzz (and reporting below) on what the IG report will contain ...

Senate Banking has a nominations hearing set for Thursday including that of Princeton Professor Alan Krueger to chair the Council of Economic Advisors. ... Senate Banking also has a hearing Thursday afternoon on the European debt crisis ... G20, IMF and World Bank all begin D.C. meetings on Friday. ... Clinton Global Initiative gets underway in NYC.

VOLCKER: DON’T MESS WITH INFLATION - Former Fed Chair Paul Volcker writes in an NYT op-ed that the calls for letting inflation rise a little bit to boost the economy are dangerous and wrong: “[T]he danger is that if, in desperation, we turn to deliberately seeking inflation to solve real problems — our economic imbalances, sluggish productivity, and excessive leverage — we would soon find that a little inflation doesn’t work. Then the instinct will be to do a little more — a seemingly temporary and ‘reasonable’ 4 percent becomes 5, and then 6 and so on.” http://nyti.ms/nnUsV0

OMNIBUS BILL AHEAD? - POLITICO’s Jake Sherman and John Bresnahan: “House Republicans have backed themselves into a corner: How do they keep the government open and pass year-end spending bills without wrapping them all into a monstrous omnibus bill — just the kind that conservatives despise and Speaker John Boehner himself slammed when Democrats ran the House? But that’s exactly where Republicans are headed as the Sept. 30 end to the fiscal year looms, and Boehner may now have to rely on Democrats and the White House to pass an all-inclusive spending bill. Conservative Republicans are already complaining ... Boehner has yet to make a final decision on whether to push an omnibus bill, and House GOP leaders have not settled on exactly what would be in that package.” http://bit.ly/mZfZ6U

OBAMA PLAN FLY-AROUND -

SOME BITS MAY GET THROUGH - WSJ’s Carol E. Lee and Damian Paletta on pg. A1: “While some pieces of Mr. Obama's plan may be agreed upon, Congress is unlikely to pass the package as proposed given Republican resistance to tax increases. Instead the plan marks the White House's opening salvo in negotiations over the next two months on how to reduce the deficit. ... Congressional Democrats have called for tax increases to be part of any deficit-reduction effort and have campaigned to maintain the country's major entitlement programs, and their wishes appear to be reflected in the president's outline. A senior administration official also said Mr. Obama will make clear that he will veto any bill that makes changes to Medicare without tax increases on the wealthy. Mr. Obama will sound a populist tone” http://on.wsj.com/qPEkKk

OPENING MOVE - NYT’s Helene Cooper on pg. A1: “The plan ... is the administration’s opening move in sweeping negotiations on deficit reduction ... Senior administration officials who briefed reporters on some of the details of Mr. Obama’s proposal said that the plan also counts a savings of $1.1 trillion from the ending of the American combat mission in Iraq and the withdrawal of American troops from Afghanistan. ... That veto threat will put the president on a direct collision course with ... Boehner, who said last week that he would not support any legislation that included revenue increases in the form of higher taxes. ... Administration officials said Sunday night that they were not including any revenue from the Buffett Rule in Mr. Obama’s overall $3 trillion proposal, adding that it was more of a guiding principle the president will adopt as budget negotiations with Congress advance.” http://nyti.ms/r3PGxo

“LITTLE CHANCE” - WP’s Zachary A. Goldfarb: “Obama’s position will probably delight Democrats, who have fretted for months that he is doing too little to solve the nation’s jobs crisis while being too willing to embrace major changes to Medicare and Social Security. But his plan has little chance of passing and is already inflaming Republicans ... Last week, Obama told supporters at a fundraiser in Washington that the upcoming debate will crystallize the difference between his views and the GOP’s. ... The spending cuts and entitlement changes are expected to come in the form of detailed language. But the tax proposals are expected to be a series of targets and goals for a tax code overhaul aimed at lowering rates for most Americans while eliminating a variety of loopholes and deductions.” http://wapo.st/obQStS

FED PREVIEWS -

EXPLICIT TARGETS? - WSJ’s Jon Hilsenrath on pg. A1: “Fed ... officials, worried that a wobbly economy and their fractious debates are confusing the public, are examining whether to adopt more explicit economic targets to clarify their strategy for lowering unemployment without fueling inflation. ... Bernanke has asked Philadelphia Fed President Charles Plosser and Chicago Fed President Charles Evans, two intellectual adversaries, to work with Vice Chairwoman Janet Yellen on how the Fed can better explain its economic goals to the public. One issue high on the agenda: Detail what changes in unemployment and inflation it would take to make the central bank veer from its low interest-rate policy ... [T]he issue about clarifying goals is unlikely to be resolved at this week's meetings, if at all, because of the wide range of views at the Fed about how to proceed.” http://on.wsj.com/pCDjsp

INVESTORS EXPECTING ACTION - NYT’s Binyamin Appelbaum on pg. B1: “Investors have concluded that the [Fed] will announce new measures to promote economic growth after a meeting of its policy-making committee ends ... Long-term interest rates have moved as if the Fed had already spoken. The central bank is often described as facing the choice of whether to do more to improve the economy. But the anticipatory behavior of investors means the Fed really faces a slightly different choice, one it has confronted often in recent years: whether to risk doing less than expected. ... But the Fed also faces mounting pressure against additional action, including strident criticism from Republican presidential candidates and divisions in the policy-making committee.” http://nyti.ms/nS5iSk

ALSO FOR YOUR RADAR -

SEC IG TO SEND FINDINGS TO JUSTICE - Bloomberg’s Robert Schmidt and Joshua Gallu late Friday: “The [SEC]’s inspector general plans to ask the Justice Department to review whether the agency's former top lawyer violated conflict-of-interest laws, according to three people with knowledge of the watchdog's findings. H. David Kotz, the inspector, is completing his report on ex-general counsel David Becker's possible conflicts and it is expected to be released next week ... Kotz and congressional investigators have been probing why Becker was allowed to work on SEC policies related to the Bernard Madoff fraud after inheriting profits from the Ponzi scheme. Kotz opened his probe after Becker and his brothers were sued by the court-appointed trustee in the Madoff bankruptcy case to recover $1.5 million in what he termed fictitious profits.” http://bloom.bg/qD8Ksz

VOLCKER TO HAVE BIG EXEMPTIONS? - FT’s Tom Braithwaite on pg. 1: “The Volcker rule, which bans US banks from trading for their own account, is set to include exemptions that some officials fear will weaken its impact ... In the wake of UBS’s $2.3bn loss last week, alleged to have been caused by the actions of a lone trader, proponents of a tough rule to constrain banks’ proprietary trading are concerned that dangerous activity will continue under the guise of customer-related transactions. ...

“According to a 174-page draft of the rules seen by the [FT] and confirmed by people familiar with discussions between regulatory agencies, so-called ‘repo’ transactions and securities lending, and near-term trading in currency and commodities - but not futures - will be permitted. The draft rules exempt from the prop trading ban ‘positions arising under certain repurchase and reverse repurchase agreements or securities lending transactions [and] bona fide liquidity management’. They also allow “positions in loans, spot foreign exchange or commodities.’” http://on.ft.com/nm0GK5

VOLCKER MAY EXTEND TO OVERSEAS BANKS - Bloomberg’s Cheyenne Hopkins and Ian Katz: “Regulators writing a rule limiting proprietary trading by U.S. banks are considering extending the restrictions to overseas firms with operations in the country ... Officials next month will issue a proposal to carry out provisions of the so-called Volcker Rule, part of the Dodd-Frank financial-regulation law. The proposal would clarify what types of offshore trading are exempt from the Volcker Rule, the people said. ... Overseas banks say that a strict interpretation of the rule may also force them to fire or relocate U.S. employees who are involved in proprietary trading, even if no American money is at risk.” http://bloom.bg/otLoSY

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